“Pouring billions of dollars into China now is a tragic mistake,” he wrote. “It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the [United States] and other democracies.”
Soros also thinks that BlackRock’s initiative is a threat to democracies because “the money invested in China will help prop up President Xi’s regime, which is repressive at home and aggressive abroad.”
BlackRock declined to comment. In the past, CEO Larry Fink has made clear that he sees the Chinese market as a massive opportunity that can’t be passed up.
“Rapid economic development and wealth accumulation in the world’s second-largest economy has propelled the growth of the $9 trillion Chinese domestic asset management industry,” he told analysts in July. “We are now well positioned to extend the breadth of our investment solutions and insights to all our client segments across China and help more people transition their savings to investments in China.”
“The case for China in the long-term is intact,” Luca Paolini, chief strategist for Pictet Asset Management, told Laura.
The S&P/BNY Mellon China Select ADR Index, which tracks American depository receipts of top US-listed Chinese firms, has risen 8% in the past week, though it’s still off 19% over the past three months. But as Xi’s campaign against private businesses continues, voices like Soros could start to carry more weight.
It’s ‘Bitcoin Day’ in El Salvador
El Salvador has become the first country to adopt bitcoin as legal tender in a risky bid by President Nayib Bukele to boost the country’s economy.
The latest: As of Tuesday, bitcoin is a formally recognized form of payment in El Salvador alongside the US dollar. Bukele announced late Monday that his government now holds 400 bitcoins, worth nearly $21 million at current trading levels.
Bukele, a right-wing populist who rose to power in 2019, is working to make “Bitcoin Day” something of a national holiday. Salvadorans will be able to download the “Chivo Wallet,” an application created by the government that will deliver $30 worth of bitcoin to people to promote its use.
“The process of #Bitcoin in El Salvador has a learning curve,” Bukele tweeted. “Every step toward the future is like this, and we will not achieve everything in a day, nor in a month. But we must break the paradigms of the past.”
The rationale: Cryptocurrencies are held in digital wallets, rather than in traditional bank accounts. That could give people in poorer communities in El Salvador, which the World Bank notes suffers from “persistently low levels of economic growth,” greater access to their finances.
The country’s government is also betting that its bitcoin approach will lure foreign investment.
That said: Bitcoin’s massive volatility poses concerns. While the digital currency recovered some lost ground following a dramatic crash earlier this year, it remains well below its record high of nearly $65,000 set in April.
In a blog post published in July, the International Monetary Fund said that using crypto as national currency was “a step too far.” It warned that such a policy would generate economic instability and wild prices, and could trigger a spike in financial crime.
Regulators fear Kim Kardashian and crypto FOMO
Regulators are worried about all the people plugging cryptocurrencies online. That includes Kim Kardashian, beauty and fashion mogul and influencer extraordinaire.
He started out by suggesting that the internet was full of … excrement.
“The Augean stables hadn’t been cleaned for 30 years when Hercules was set the labor of cleaning them. For 30 years, 3,000 animals had been doing in those stables what 3,000 animals have to do,” Randell said. “The first website was published 30 years ago last month. And like the Augean stables, over the last 30 years the internet has filled up with a great deal of … well, let’s just call it ‘problematic content.'”
He then trained his attention on Kardashian, who, he noted, recently plugged “Ethereum Max” to 250 million Instagram followers.
“In line with Instagram’s rules, she disclosed that this was an #AD,” Randell said. “But she didn’t have to disclose that Ethereum Max — not to be confused with ethereum — was a speculative digital token created a month before by unknown developers, one of hundreds of such tokens that fill the crypto-exchanges.”
Step back: Randell acknowledged that he can’t say whether this particular token is a scam. But he emphasized that regulators needed to do more to rein in this type of online activity. Platforms like Facebook, Twitter and TikTok, he said, also need to “step up.”
“The hype around [cryptocurrencies] generates a powerful fear of missing out from some consumers who may have little understanding of their risks,” Randell said.
And he had a clear reminder for prospective consumers: “These tokens are not regulated by the FCA. … If you buy them, you should be prepared to lose all your money.”